Welch joins bipartisan coalition in introducing bill to encourage saving for home down payments

Burlington — Last week, Rep. Peter Welch joined with Rep. Joe Heck (R-NV), John Carney (D-DE) and Daniel Webster (R-FL) to introduce the “Creating Homeownership Opportunities Act.” This is bipartisan legislation that would create a pre-tax savings program — similar to a Health Savings Account — for the purpose of saving toward a down payment on a first home. Rep. Welch made the following comments after introducing the legislation:

“The recession and sluggish recovery have pushed the dream of homeownership out of reach for too many Americans,” said Rep. Peter Welch. “Our bill will provide a real boost to families at a time when they need it most by providing an incentive to save for a down payment on their first home. I’m proud to work with this bipartisan group of lawmakers to introduce a common sense solution that provides real relief to hard working Americans.”

The bill, known as H.R. 2929, would make first-time home buyers eligible to make annual contributions up to $10,000, indexed for inflation. Qualifying purchases would include the down payment on a primary residence, as well as closing costs and fees associated with the purchase of that home. Non-qualified disbursements would be subject to income tax, as well as a 20 percent penalty — a structure mirroring that of a Health Savings Account. An account balance may be rolled over into an IRA to supplement retirement savings if an account holder reaches 55 without purchasing a home, maintains the account for 20 years without purchasing a home, or purchases a home and has a remaining balance in the account.

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